Horizontal agreements (i.e. agreements between firms that operate on the same production or commercial level) are likely to affect competition and are subject to EU competition rules, specifically Article 101 TFEU.

The European Commission adopted in 2011 guidelines to assess agreements related to cooperation between competitors. These guidelines complement the block exemption regulations for research & development (R&D) agreements and specialisation agreements. Serious forms of competitive restrictions (so-called hardcore restrictions) such as price-fixing arrangements, constraints on production, market shares or customer groups are prohibited, regardless of the market position of the parties.

The threshold for the combined market share that the contracting companies can reach to enjoy the benefit of a block exemption is 20% (in the case of specialisation agreements) or 25% (R&D agreements). If these values are exceeded, R&D- and specialisation agreements are not automatically prohibited but must be assessed individually in light of an exemption under Article 101 (3) TFEU.

The assessment under Article 101 (3) TFEU is carried out through a market analysis which carefully balances the economic pro-and anti-competitive effects of an agreement. Only when positive effects outweigh negative effects can an undertaking be granted exemption from the cartel prohibition despite high market shares.

EE&MC has outstanding expertise to perform such analyses and carry out the correct market definition.